Land in Uganda is said to be generally overpriced, with speculation and high real estate demand driving “value”, at least relative to the income levels in the country, according to Numbeo, the world’s largest cost-of-living and quality-of-life database. In fact, the firm says that Kampala has the “most expensive real estate in Africa”, according to the price-to-income ratio.
This is now set to become even worse as the government commences implementation of tax and land reforms that were passed prior to passing of the 2026/2027 national budget. These include the Stamp Duty Amendment Act, which doubled the duty to 3 percent of the value of the land, the Income Tax amendment that saw adjustments in the capital gains tax in land sales, among others.
This means that a peace of land sold valued at 10 million shillings will attract a duty of 300,000 shillings, up from 150,000 previously. Stamp duty is a mandatory tax levied by the government on legal documents and financial transactions to make them legally binding, including property purchase or lease agreement signing.
So now, the law requires that before a land transfer, both the seller and the buyer must have Tax Identification Numbers (TIN), Stamp Duty should be paid within 45 days after the transaction.
Following the passing of the Bill, and the reading of the budget, the Manager of Genuine Estates Uganda Ltd, Bazade William, says that even land that had been sold before but not yet paid the Stamp Duty is unfortunately supposed to be taxed at the new rate.
Maureen Wagubi, Chief Executive Officer of Institute for Social Transformation, says the new Stamp Duty rate will make it harder for young persons and women to acquire assets.
“This has been the rhetoric, women have no access to land. We want land but we have no access to it,” she says. “And we’re trying to have different programmes that are trying to facilitate women so that they can have access but it is still failing. And when you bring this tax on land, it means there are many people who are not going to afford the land.”
On the other hand, Capital Gains Tax is a charge on the voluntary disposal of an asset, on the value gained since the asset was acquired by the one now seeking to sell. The Ministry of Finance, Planning and Economic Development had proposed that non-business assets in urban areas attract a 5 percent tax on the gain realised by the seller.
This would be calculated at 5 percent of the difference between the selling price and the documented acquisition price and related expenses. However, during debate of the Bill, parliament flatly rejected the proposed amendment on grounds that it would affect the ability of, especially low earners, to acquire land.
So an individual selling personal, family, or inherited land that is not part of a business or commercial real estate operation, does not owe any Capital Gains Tax to URA. Business assets, including land acquired or kept for commercial use, attracts the usual 30 percent income tax, according to Global Law Experts.
Because Parliament officially rejected the proposal to tax non-business asset disposals, the associated plans to introduce a withholding mechanism on personal land sales were also dropped. If land is a business asset, a 6% withholding tax applies to the gross payment. Once taxes are cleared, the transfer must be registered with the Ministry of Lands, Housing and Urban Development, with a registration fee for the new land title ranging from 20,000 to 50,000 shillings.
Experts advise that sellers disposing of commercial or residential property obtain a certified professional valuation of the property to establish a clear, legally recognized cost base. Without verifiable documentation of what the land was originally worth or what was spent on improvements, the URA may assess tax on a much higher profit margin-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
